Business Funding Authority and Personal Guarantee Checklist
A funding application can expose a household to business risk when signing authority, ownership, guarantees and repayment duties are unclear. This checklist helps a South African founder prepare the evidence before accepting finance.
This is general information, not financial, legal, tax, credit or Shariah advice. Have the final contract reviewed by appropriately qualified professionals and a Shariah adviser where required.
1. Name the exact funding purpose
State whether the money will buy identified stock, equipment, premises, working capital or ownership. Record the amount, supplier, payment dates and expected cash-generation period. A precise use makes unsuitable structures easier to reject.
2. Identify every legal party
List the borrower or buyer, financier, supplier, guarantor, surety, asset owner and beneficial owners. Confirm company names and registration numbers against current CIPC records. Trading names do not establish who owes the obligation.
3. Prove who may sign
Keep the memorandum of incorporation, securities register, current director details and board or member resolution. The resolution should name the transaction, limits and authorised signatories. Bank access or an operational job title is not enough.
4. Reconcile beneficial ownership
Check that company records, CIPC beneficial-ownership information and the proposed finance documents agree. Resolve nominee, trust or family arrangements before signing so control is not misrepresented.
5. Separate company debt from personal risk
Mark every clause that creates a personal surety, guarantee, co-principal-debtor obligation, pledge or cession. Record whose home, savings, shares, policies, receivables or other assets could be reached if the business defaults.
6. Build a guarantee register
For each guarantee record the creditor, covered obligations, monetary cap, duration, security, review date and cancellation method. Confirm whether it covers future facilities or survives a change in ownership. Do not rely on a verbal promise that it will later be released.
7. Check matrimonial and consent questions
Obtain contract-specific legal advice on the founder's matrimonial property regime and any required consent. Do not add a spouse as guarantor merely for convenience. Record the household impact if either signature creates joint exposure.
8. Match the Shariah structure to the transaction
Identify whether the proposal is a loan, sale, lease or partnership in legal and economic substance. For Murabaha, verify the asset, acquisition, ownership sequence, disclosed price and delivery. For Ijarah, document ownership risk, use and maintenance. For partnership funding, define profit, loss, management and exit.
9. Test affordability from cash dates
Prepare a thirteen-week cash-flow view and a longer downside case. Use actual customer collection dates, tax obligations, supplier terms, seasonal stock and owner pay. Test the scheduled payment without assuming every invoice is collected on time.
10. Reconcile total cost
List purchase price or capital advanced, profit or rental, initiation and legal fees, valuation, insurance or Takaful, security registration, taxes, late-payment treatment and early-settlement terms. Compare cash totals and timing, not only a headline rate.
11. Verify the provider and intermediary
Check relevant authorisation on the FSCA regulated-entities search and, where applicable, the National Credit Regulator register. Regulatory status and Shariah governance answer different questions; retain evidence for both.
12. Control documents and data
Create a submission index for financial statements, management accounts, tax records, bank statements, contracts and identity documents. Share through authorised channels, restrict access and record retention. Do not send a wider customer or employee dataset than the decision requires.
13. Set approval conditions
Before signature, assign an owner and deadline to unresolved terms, valuations, tax consequences, security releases and Shariah questions. Require a clean final document set and compare it with the approved term sheet.
Funding authority register fields
Purpose, amount and asset
Legal parties and beneficial owners
Authorising resolution and signatories
Guarantee, surety and pledged assets
Total cost and payment dates
Legal, tax and Shariah reviewers
Conditions before drawdown
Review and release dates
Official starting points
Practical outcome: the company accepts funding only after authority, cost, security, household exposure and Shariah evidence are recorded in one decision file.
